62 detained in €410m mobile phone VAT fraud investigation

Authorities have detained 62 suspects in an investigation into alleged VAT carousel fraud involving mobile phones and other electronic devices, with estimated tax losses of at least €410 million. 

The European Public Prosecutor’s Office (EPPO) said more than 300 searches took place on October 7 across eight countries, including Germany, France, Italy and Spain.

Thirty-nine suspects were detained in Portugal, 20 in Spain and three in Italy.

Authorities executed seizure orders targeting up to €310 million, freezing bank accounts and company shares and seizing property, vehicles, cash and gold coins.

Operation Hermes concerns two suspected criminal syndicates allegedly using networks of intermediary companies to exploit cross-border VAT rules.

Prosecutors say goods passed through chains involving “missing traders” that disappeared without paying tax, while other companies claimed VAT refunds.

The groups allegedly shared companies, goods and logistics services, and channelled proceeds through each other’s businesses to launder money.

EPPO says some individuals and methods overlap with its earlier Admiral and Moby Dick investigations. One suspect allegedly moved operations to Portugal after a Swedish VAT fraud investigation.